Frequently asked questions about Barclays PLC sell-down

Barclays PLC, based in London, announced on 1 March 2016 that it would reduce its ownership of Barclays Africa from 62.3% to a minority shareholding, over time. Global bank regulations tightened after the 2008 world financial crisis, making it less attractive for international banks like Barclays PLC to own stakes in banks abroad.

On 5 May 2016 the first share tranche of 12.2% was successfully sold through an accelerated book build – reducing the Barclays PLC shareholding to 50.1%.

On 31 May 2017 Barclays PLC further reduced their shareholding to 23.4% through the largest book build in South African history. A further 7% will be taken up by the Public Investment Corporation at a later date, following receipt of the necessary regulatory approvals.

In addition to the sale of shares on 31 May 2017, Barclays PLC will contribute the equivalent of 1.5% of Barclays Africa’s market capitalisation, equating to approximately R1.85bn (based on Barclays Africa’s share price of R145.95 as at 30 May 2017), towards the establishment of a broad-based black economic empowerment scheme.

Barclays PLC is no longer the controlling shareholder of Barclays Africa, which now has a diverse shareholder portfolio made up of very supportive, long-term, institutional and individual investors.

Barclays PLC will remain an important shareholder and will support Barclays Africa throughout the sell-down and operational separation processes, which are already well underway. Barclays PLC and Barclays Africa will continue to work with regulators to ensure that the separation is managed appropriately, with no unnecessary impact to stakeholders or the business.

The shareholding reduction will not change our position as one of the continent’s largest financial services providers, serving close to 12 million customers through our operations in 10 countries in Africa, where some of our largest markets are in South Africa, Kenya, Zambia, Botswana, Tanzania and Ghana.

Our shareholding and our name may change over time but we are the same financial services provider. Our commitment to the continent is stronger than ever and we now have a significant opportunity to make our own decisions on what is right for a pan-African focused business. Our destiny is Africa.

Ten key questions:

  1. Why is Barclays selling?

    After the global financial crisis in 2008, regulators introduced new rules which have had far-reaching effects on banks. One of the consequences was that it became less attractive for global banks such as Barclays to own stakes in banks abroad.

    As a controlling shareholder, Barclays PLC carried 100% of the financial responsibility for Barclays Africa, but received only 62% of the benefits.

  2. Will the brand change?

    The business that is known as Barclays Africa today has deep roots in Africa. In Kenya, for example, Barclays has been a household brand for more than 100 years.

    We will have to change our brand over time, and we now have the opportunity to build a strong, Africa-focused brand. It will take some time and we will inform you well in advance.

  3. Will you keep your operations in the various countries in Africa?

    Barclays Africa owns businesses in 10 markets in Africa: Botswana, Ghana, Kenya, Mauritius, Mozambique, Seychelles, Tanzania, Uganda, Zambia and South Africa (where we are known as Absa). We also have representative offices in Namibia and Nigeria. We are not selling any of these as a result of the ownership change between Barclays PLC and Barclays Africa.

  4. How does Barclays leaving affect customers and partners?

    Like most large companies that have been in business for more than a century, we have had several shareholder changes over that time.

    As has been the case during most shareholder changes, for the most part, it will be business as usual for our customers and partners. We will let you know well in advance if there are any changes.

  5. Who are the new owners?

    Barclays Africa Group now has widely distributed shareholding. Aside from Barclays PLC and, South Africa’s Public Investment Corporation (PIC), no shareholder owns more than 5% of Barclays Africa Group (as of 1 June 2017).

  6. What role do regulators play in the process?

    Bank regulators, including the South African Reserve Bank, have several requirements that we must meet to ensure that there are no disruptions to the markets in which we operate.

    Barclays PLC and Barclays Africa are working together to ensure that the process is undertaken in an orderly way.

  7. Is my money safe?

    Our customers can be just as confident doing business with us today as they have always been.

    We are financially independent from the global Barclays group and always have been.

    We remain a well-capitalised, profitable bank, regulated by the South African Reserve Bank and by the regulators in each of the countries in which we operate.

  8. Is Barclays Africa dependent on the global Barclays group for funding?

    No. Barclays Africa is not reliant on the global Barclays group for funding, capital or liquidity.

    Barclays Africa is independently listed on the Johannesburg Stock Exchange. We have a strong balance sheet of over R1 trillion and are well capitalised.

  9. Is Barclays Africa going anywhere?

    Certainly not. We continue to invest and grow in Africa where we make a significant economic contribution. In the 2016 financial year, Barclays Africa:
    • Paid R8.5bn in dividends to shareholders
    • Retained earnings of R6bn for future growth
    • Reached market capitalisation of R143bn
    • Contributed R7.3bn in taxes
    • Held 1 207 branches and 10 013 ATMs
    • Invested R3.1bn in Information Technology
    • Paid R20.8bn in salaries to 41 241 employees, investing R376m in training and development
    • Serves 11.8m customers and clients, providing over R720bn in gross loans and advances, safeguarding R675bn in deposits and managing more than R288bn of assets on behalf of our customers and clients
    • Spent R17.6bn on procurement
    • Invested R184m in education and skills development and 10 582 employees volunteered 55 291 hours
    • Reached 41 200 SMEs through a series of seminars, conferences and workshops
    • Raised R1.38bn in financing for small and medium enterprises
  10. How are Barclays in Egypt and Zimbabwe affected?

    Barclays Africa does not own the Egypt and Zimbabwe operations. Barclays PLC owns Barclays in Egypt and Zimbabwe. In October 2016 Barclays announced the sale of the Egypt business to Attijariwafa Bank and in June 2017 announced the sale of the Zimbabwean business to First Merchant Bank Limited.